Spot gold was 0.1 percent higher at $1,252.74 an ounce, as of 0400 GMT. In the previous session, the metal touched $1,250.30, its lowest since mid-December.
U.S. gold futures for August delivery were down 0.2 percent at $1,254.20 an ounce.
· "There's a little bit of a pullback in the U.S. dollar, so that explains some recovery in gold," said Helen Lau, analyst at Argonaut Securities.
· The dollar held steady against its rivals on Thursday, though it failed to build on overnight gains amid conflicting signals from Washington on a proposal to restrict Chinese investment as the bitter U.S.-China trade row kept financial markets on edge.
· However, gold prices which usually rise in times political and economic uncertainty, have gained little support from these trade tensions, while expectations that the U.S. Federal Reserve will hike interest rates have pressured bullion.
· "The dollar may continue to strengthen because of rising U.S. interest rates and yields. That is all the key reason that makes holding gold unattractive," Lau added.
· Boston Federal Reserve President Eric Rosengren on Wednesday said the central bank should continue to gradually raise interest rates to lower the risk of a major policy error.
· The U.S. economy is growing at a 4.5 percent annualized rate in the second quarter following the latest data on home sales and advance trade balance released this week, the Atlanta Fed's GDPNow forecast model showed.
· The Fed is expected to raise interest rates at least four times this year, which will likely dent gold prices.
· In other precious metals, spot silver was 0.4 percent higher at $16.10 an ounce.
· Palladium rose 0.3 percent to $950.45 an ounce, while platinum fell 0.3 percent to $853.80 per ounce.
· Technically, the gold bears have the firm overall near-term technical advantage. A 2.5-month-old downtrend is in place on the daily bar chart. However, the market is now short-term oversold and due for a corrective bo0unce. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,286.80. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the December low of $1,251.90. First resistance is seen at today’s high of $1,261.90 and then at Tuesday’s high of $1,269.40. First support is seen at today’s low of $1,253.30 and then at $1,251.90.Wyckoff's Market Rating: 2.5
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